Emerging competition between energy networks

Technological innovation and ongoing decarbonization are introducing new energy conversion technologies into energy systems. Decentralization furthermore enables new supply paths. These new and alternative conversion options and supply paths foster substitutability between energy vectors and thus potentially raise competition between different network infrastructures. In a net-zero future, the demand for vehicle fuel, for example, can be supplied by at least two alternative energy carriers: hydrogen and electricity. For hydrogen, the alternatives further include electrolysis either at the electricity source or at the hydrogen sink- i.e., near the wind farm or near the gas station. All supply paths originate in a renewable energy source such as a wind farm but require different transport and conversion infrastructure. Similarly, gas, electricity and heat networks are alternatives for the supply of space heating.

Thus, the different energy networks can increasingly be considered as substitutes in a kind of intermodal competition. This paper aims to investigate the question of efficient development of alternative and parallel networks when there is some form of intermodal competition. Of particular interest are frameworks where (1) some networks are initially more developed than others and where (2) some substitutes, resp. modes are more competitive than others. If certain circumstances may propel an equilibrium which is different from the social optimum, a subsequent question arises regarding regulation, state subsidies and policies to ensure optimal development of the networks in the presence of intermodal competition.

By: Christine Brandstätt , Rahmat Poudineh


Electricity , Electricity Programme